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CBO: Extreme Tort Reform Would Save Very Little

The CBO is out with an analysis on the effect of tort reform. Despite Republican claims that it is practically a cure-all for the nation’s out-of-control health care costs, its effect would be very minor. The CBO analyzed the effect of adopting several extremely rigorous changes to our legal system including:

  • A cap of $250,000 on awards for noneconomic damages;
  • A cap on awards for punitive damages of $500,000 or two times the award for economic damages, whichever is greater;
  • Modification of the “collateral source” rule to allow evidence of income from such sources as health and life insurance, workers’ compensation, and automobile insurance to be introduced at trials or to require that such income be subtracted from awards decided by juries;
  • A statute of limitations—one year for adults and three years for children—from the date of discovery of an injury; and
  • Replacement of joint-and-several liability with a fair-share rule, under which a defendant in a lawsuit would be liable only for the percentage of the final award that was equal to his or her share of responsibility for the injury.

Even if the country adopted all of the proceeding changes, the effect on the federal budget would be small. The CBO predicts that the changes would save government programs $41 billion and generate roughly $13 billion in new revenue over the next decade. If incredibly stringent tort reform were implemented nationwide, “it would reduce total national health care spending by about 0.5 percent.”

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at